Marketing Environment (1)

The The Marketing Marketing

EnvironmentEnvironmentDr.S.Victor Anandkumar

Associate ProfessorDepartment of Management Studies

Pondicherry University

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Marketing Marketing EnvironmentEnvironment

• … consists of the actors and forces outside marketing that affect marketing management’s ability to develop and maintain successful relationships with its target customers.

• Includes:o Micro-environment - forces close to the

company that affect its ability to serve its customers.

o Macro-environment - larger societal forces that affect the microenvironment.

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TargetConsumers

Product

Place Price

Promotion

Marketi

ng

Imple

mentat

ion

Marketing

Planning

Marketing

Control

Marketi

ngAn

alysis

Competitors

MarketingIntermediaries

PublicsSuppliers

Demographic-Economic

Environment

Technological-Natural

Environment

Political-Legal

EnvironmentSocial-Cultural

Environment

The Marketing The Marketing Process Process

The Company’s The Company’s Micro-environmentMicro-environment

• Company’s Internal Environment - functional areas inside a company that have an impact on the marketing department’s plans

• Suppliers - provide the resources needed to produce goods and services and are an important link in the ‘value delivery system’

• Marketing Intermediaries - help the company to promote, sell, and distribute its goods to final buyers. i.e. dealer

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The Company’s The Company’s Micro-environmentMicro-environment

• Customers - types of markets that purchase a company’s goods and services

• Competitors - those who serve a target market with similar products and services against whom a company must gain strategic advantage

• Publics - any group that perceives itself having an interest in a company’s ability to achieve its objectives

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Types of Customer Types of Customer MarketsMarkets

(B2C, B2B, B2G, channel, (B2C, B2B, B2G, channel, global)global)

Government Markets

International

Markets

ResellerMarkets

Business

Markets

Cons

umer

Mar

kets

Company

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Major Forces in the Major Forces in the Company’s Macro-Company’s Macro-

environmentenvironment

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The Company’s The Company’s Macro-environmentMacro-environment

• Demographic - Population in terms of size, density, location, age, gender, race, occupation and other statistics

• Economic - factors that affect consumer purchasing power and spending patterns

• Natural - natural resources needed as inputs by marketers or that are affected by marketing activities

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What can you make out from the What can you make out from the Consumption Patterns in these selected Consumption Patterns in these selected

Countries?Countries?

Economic Economic EnvironmentEnvironment

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EconomicDevelopment

Changes in Income:Value Marketing

Changing ConsumerSpending Patterns

KeyEconomic

Concerns forMarketers

Natural EnvironmentNatural Environment

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Factors Affecting

the Natural

Environment

Shortages of Raw Materials

Increased Pollution

GovernmentalIntervention

Environmentally SustainableStrategies

The Company’sThe Company’sMacro-environmentMacro-environment

• Technological - forces that create new technologies, creating new product and market opportunities

• Political - laws, agencies and pressure groups that influence and limit organizations and individuals in a given society

• Cultural - institutions and other forces that affect a society’s basic values, perceptions, preferences, and behaviors

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Technological Technological EnvironmentEnvironment

• Faster pace of technological change; products are outdated at a rapid pace.• Almost unlimited opportunities being developed

daily in health care, space industry, robotics, and bio-genetic field.

• Challenge is not only technical, but also commercial – make practical, affordable versions of products

• Increased regulation concerning product safety, individual privacy, and other areas that affect technological changes.

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Digital Digital DivideDivide

[Source: World Bank an [Source: World Bank an

UN]UN]

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Political EnvironmentPolitical Environment

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Increasing Legislation

Changing Government

AgencyEnforcement

Includes Laws, Government Agencies, Etc. that Influence & Limit Organizations/ Individuals in a Given Society

IncreasedEmphasis on

Ethics &Socially

ResponsibleActions

A Sampling of Government A Sampling of Government TypesTypes

• Insert Exhibit 6.1

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Source: Business Software Alliance – IDC Global Software Privacy Study

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Cultural EnvironmentCultural Environment

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People’s View of Organizations

People’s View of Nature

People’s View of Themselves

People’s View of Society

People’s View ofthe Universe

People’s View of OthersCultural Values

of a Society

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Rediff.com

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Cues from the cultural Cues from the cultural environment environment

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Responding to the Responding to the Marketing Marketing

EnvironmentEnvironment• Taking a proactive approach to managing the micro-environment and the macro-environment by taking aggressive (rather than passive) actions to influence the publics and forces in the marketing environment. •How? Hire lobbyists , run “advertorials”, press law suits, file complaints, form agreements, … 33

Global business Global business environmentenvironment

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A quick revisionA quick revision• Describe the environmental forces that

affect the company’s ability to serve its customers.

• Explain how changes in the demographic and economic environments affect marketing decisions.

• Explain the key changes faced by marketers from the political and cultural environment 35